The OECD Directorate for Science, Technology and Innovation (STI) leads OECD research on the contribution of science, technology and industry to well-being and economic growth. STI Working Papers cover a broad range of topics including definition and measurement of science and technology indicators, global value chains, and research on policies to promote innovation. These technical or analytical working papers are prepared by staff or outside consultants to share early insights and elicit feedback.

The small Portuguese venture capital market is characterised by expansion-stage investments in manufacturing industries, primarily consumer goods. Government equity programmes, which have tended to be investment vehicles for European structural funds, have crowded out potential private investors. Recent initiatives, including a new venture captial law and a scheme aimed at leveraging private venture funding, should help stimulate venture activity. Measures are also needed to foster the emergence of more entrepreneurs, create a less risk-averse investment culture, and take fuller advantage of international venture capital flows. This paper analyses trends in Portuguese venture capital markets and makes policy recommendations which have been developed through an OECD peer review process ...